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Comprehensive Spending Review
13. Mr. Andrew Robathan (Blaby): What plans he has to ensure that there can be parliamentary scrutiny of his comprehensive spending review before the final results are published. [41685]
The Chief Secretary to the Treasury (Mr. Alistair Darling): The results of the comprehensive spending review will be announced to Parliament for scrutiny and examination in the normal way. It will be for the usual channels to discuss the way in which the House debates those proposals at some point after the initial statement.
Mr. Robathan: The hon. Member for North-East Derbyshire (Mr. Barnes) has suggested that pledges are not necessarily binding. Does the Chief Secretary recall his right hon. Friend the Chancellor making a pledge when in opposition that he had no spending plans that would require extra taxation? Yet since the election, there have been at least 17 tax rises based, presumably, on spending, so that is one broken pledge. After the comprehensive spending review is revealed, how many new tax rises will there be?
Mr. Darling: The hon. Gentleman will have to wait and see what the Government propose after their spending review. I remind him that, unlike the previous Government, every promise that we made at the election has been kept and will be delivered on by the end of this Parliament. That is something which the Opposition could never claim because they misled people on tax and just about everything else, which is why they are sitting on the Opposition Benches in such reduced numbers.
Mr. Christopher Leslie (Shipley): Will my right hon. Friend consider making Treasury economists available to the Opposition so that they can conduct their own comprehensive spending review? He may well have noticed that during the past month alone, amendments have been tabled to the Finance Bill and the Social Security Bill totalling more than £6 billion--a massive hole in public finances. Perhaps the Conservatives have been infected by the financial recklessness of their Liberal Democrat colleagues on the Opposition Benches.
Mr. Darling: I am not sure that it is just economic advice that the Conservative party is in need of. It is perfectly obvious that the Opposition--at least, the main Opposition party at present--are increasingly giving up any prospects for the future. Not only have they adopted a policy on Europe that many people, in particular business people, find absolutely incredible, but they have already demonstrated that they would be prepared to spend huge sums without giving us any indication about how they might finance that spending. Their antics and their policies are becoming more incredible by the day.
Mr. John Swinney (North Tayside): When the Chief Secretary contributes to the usual channels' discussion of
how the comprehensive spending review is to be considered by Parliament, will he support an initiative to give the departmental Select Committees the opportunity to look in detail at the Government's proposals, to ensure that any potential damage to existing public services from the review is aired in the full light of day before Parliament, through scrutiny in those Committees?
Mr. Darling: Select Committees are entirely independent of the Government, and it is up to them what they scrutinise and when. As always, the Government are happy to co-operate with anything that they want to do. I am not part of the usual channels, as the hon. Gentleman knows, but I am sure that his representative in that department will ensure that whatever the Committees want to do to ensure that our spending plans and policy proposals are properly scrutinised is taken on board. The Government are moving towards the concluding stages of the review and, because we are determined to deliver our manifesto promises, we are happy to justify those promises to anyone, inside or outside this House, whenever they want.
Pensioners' Fuel Bills
14. Mr. Vernon Coaker (Gedling): What representations he has received on his tax and benefit changes to reduce pensioners' fuel bills. [41687]
The Paymaster General (Mr. Geoffrey Robinson): My hon. Friend will be interested to know that we have received 1,000 representations on pensioners' winter fuel bills. He will be aware that there has been widespread acceptance and endorsement of the measures that we have taken on that matter, which include the abolition of the gas levy, the reduction in value added tax to 5 per cent. for energy-saving materials and the reductions in other areas. Taken together with the £20 and £50 announced by my right hon. Friend the Chancellor for winter fuel bills last winter, that means that pensioners will be better off on their winter fuel bills alone by between £100 and £130.
Mr. Coaker: I thank my hon. Friend for that answer and congratulate the Government on their measures so far to help pensioners with their fuel bills, in marked contrast to the policies of the previous Government. However, does he agree that it is important not only to help pensioners pay their bills, but to ensure that those bills are as small as possible in the first place? We need the Government to do as much as possible to keep those bills small through various measures. Will he join me in congratulating my authority, Gedling borough council, which recently launched a wide range of energy-saving initiatives to help pensioners in particular to stay in their own homes and keep their fuel bills low?
Mr. Robinson: My hon. Friend is absolutely right on both counts. I would add that local authorities throughout the country are taking up the opportunity offered by the
reduction in VAT on energy-saving materials to do precisely what he said; I compliment Gedling local authority on doing so.
Mr. Nick Gibb (Bognor Regis and Littlehampton): What is the Government's latest estimate of the cost of the tens of thousands of £10 and £20 cheques sent out in error, which will not be refunded to the Treasury?
Mr. Robinson: The hon. Gentleman is trying to zero in on a narrow and irrelevant point--he should consider that there were 6 million communications, of which a small proportion fell into that category. Why does he not think of the 6 million pensioners who got the benefit, instead of trying to narrow in on a small and incidental administrative point?
Bank of England Reserve Requirements
15. Mr. Nick St. Aubyn (Guildford): What plans his Department has to extend the use of Bank of England reserve requirements as an instrument of monetary policy. [41688]
The Paymaster General (Mr. Geoffrey Robinson): None.
Mr. St. Aubyn: The rate of inflation last May was 2.5 per cent., which was exactly in line with the previous Government's target; the rate of inflation today is 4 per cent., which is 1.5 percentage points above this Government's target. Do Treasury Ministers accept that it is their failure of fiscal policy, in particular increasing taxes twice in one year, which has caused the increase in inflation? Will they, instead of asking the Bank of England to write to them explaining the failure of monetary policy, write a letter to the Bank to explain their deeply flawed judgment on fiscal policy?
Mr. Robinson: None of that arises from the question, but I am quite happy to reply to the hon. Gentleman. We need no lectures from the Conservative party, whose Government saw inflation rise to 21 per cent. in 1980. Inflation will come down as our long-term policies for stability and growth prove to be correct, and we avoid the boom-and-bust economic policies that the previous Government went in for. We go for long-term policies because there is no quick fix. For the hon. Gentleman's information, the Bank of England has expressly ruled out using the reserve ratios as an instrument of monetary policy; it did so last August, as recorded in the report of that date at paragraph 63.
ROYAL ASSENT
Madam Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts:
Animal Health (Amendment) Act 1998
Social Security Act 1998
Magistrates' Courts (Procedure) Act 1998
Tax Credits (Initial Expenditure) Act 1998
The President of the Board of Trade and Secretary of State for Trade and Industry (Mrs. Margaret Beckett):
The Government have published today the White Paper "Fairness at Work", which is a further landmark in our drive to create both a more prosperous and a fairer Britain.
Let no one doubt that, in the modern world, those two ambitions go hand in hand. Companies and organisations that succeed in today's and tomorrow's world need to address and to anticipate the needs of their customers. To do so, they must draw out, and draw on, the native ingenuity, the innovative ability and the creativity of every one of their work force. The prosperity and opportunity of each are bound up with the prosperity and opportunity of all.
Some of the issues that we address in the White Paper relate simply to human dignity and enshrine simple individual rights. To assure them is simple justice, but it is also good hard economic and industrial sense.
Our industrial policy rests on the three pillars of strong markets, underpinned by our Competition Bill, modern companies, promoted by the White Paper, and building an enterprising nation, which requires those steps among others.
The White Paper is set in the context of action that the Government have already taken to create a fresh balance of rights and responsibilities at work, including signing the social chapter, bringing in, for the first time, a national minimum wage, implementing the working time directive, simplifying procedures for check-off and restoring trade union membership rights at GCHQ. Those were all necessary steps, but they are not sufficient to create a new and better balance in the fast-changing world of work.
The White Paper looks to the future, not the past. There will be no going back to the days of strikes without ballots, mass picketing and the closed shop. We are setting out to foster and support a new culture in the workplace--a culture of partnership. That culture is already evident in many of our most successful and modern companies, but the framework of our existing law all too often undermines or runs clean counter to it.
We expect and anticipate that many of the matters that we address, where differences of interest or of emphasis may genuinely arise, will be settled voluntarily and without recourse to the law, but, if required, the law must be able practically and sensibly to provide peaceful means to resolve disputes if they arise.
The proposals we make fall broadly into three areas: rights for the individual, collective rights and the development of policies that are family friendly. We also propose further consultation on many issues relevant to changing patterns of work. Those changing patterns can underpin flexibility and competitiveness, but they are undermined by a lack either of security or of confidence. So, in a world of far more frequent job changes, employees who have qualified for protection are reluctant to lose it by changing jobs.
Therefore, we propose, first, to reduce the qualifying time for protection against unfair dismissal from two years to one. We also propose to remove the limit on compensation for unfair dismissal, so that people who are
unfairly dismissed can recover their full loss. That will end the anomaly whereby there is no limit on compensation for those unfairly dismissed on grounds of sex or race, but those dismissed for other reasons can at present be awarded only a maximum of £12,000. We also intend to index link other statutory employment awards and payments in future.
We propose, too, to consult business and others on whether--and, if so, what--changes are needed to the law on short-term and zero-hours contracts. Contract work can provide useful flexibility to both employers and employees, and the Government would not wish to lose that flexibility, but poor employment practices discredit such arrangements and deter people from taking advantage of the flexibilities offered by contract work in other organisations.
Secondly, we also need to establish a framework that promotes constructive dialogue between employers and employees. That will include implementing the European works council directive on consultation arrangements at work by the end of next year. In many cases, such dialogue is best established by collective arrangements, which are often the preferred option of both employers and employees. In other cases, more informal consultative arrangements can be suitable.
I shall not attempt in this short statement to detail all the changes we propose, but central to the White Paper is the promise in our manifesto to legislate to enable employees to have a trade union recognised by their employer where the majority of the work force want it. The Confederation of British Industry and the Trades Union Congress have worked together, and with the Government, to create as much common ground as possible on the practical issues surrounding such legislation.
The Government believe that mutually agreed arrangements for representation are the best way to proceed; but there are occasions when employees want to be represented by a trade union, but their employer will not agree. The Government believe that better and more effective relationships at work are fostered by having a clear procedure for the resolution of such disagreements, which is itself based on the starting point of voluntary agreement.
The Government propose that the law should require employers to recognise a union where the majority of those voting, and at least 40 per cent. of the eligible work force, are in favour of recognition. That will make it crystal clear that a vote for recognition enjoys genuine and widespread support among employees, and provides a sustainable basis for collective bargaining.
If there are issues on which the parties cannot agree, a restructured and reinforced Central Arbitration Committee will play a supervisory role--judging, for instance, whether the union has proposed a suitable bargaining unit, whether it has reasonable support within it, and whether a sufficient majority of employees support recognition.
When more than 50 per cent. of employees are union members, thus clearly demonstrating that they want to be represented by a union for collective bargaining, recognition will be automatic. There will be a similar procedure for derecognition, and the Government invite views on its operation. No new applications for recognition or derecognition will be considered until three years after a previous application.
The Government recognise that these arrangements may not suit the circumstances of small firms. The statutory procedures will not therefore apply to firms with 20 or fewer employees, although many small firms will no doubt recognise unions, as they do now.
Let me reiterate one vital point. The legal framework that we have proposed will come into play only when employers and employees cannot reach agreement on recognition; but, by ensuring that a clear procedure is in place and known from the outset of discussions, we believe that voluntary agreement is more likely to be achieved and industrial action to be avoided. Neither employers nor employees gain from the present arrangements, and the protracted disagreements that can occur only damage future relationships, whether a union is recognised or not.
The Government intend to take other collective measures--for instance, giving employees greater rights to complain of unfair dismissal if they are dismissed while on official strike, and a right for anyone to be accompanied by someone of their choice, who may be a trade union official, at grievance or disciplinary procedures.
Thirdly, we must recognise the special responsibilities of parents. We place great demands on them. Most need to work to give their children a secure life, but children need their parents' time, too, if family life and society are to be cohesive. The White Paper sets out policies that will enhance family life while making it easier for both men and women who work to avoid conflicts between their responsibilities at home and at work.
The Government will, for example, ensure that employees can take parental leave and reasonable time off for family emergencies, and will clarify the law on maternity rights, extending maternity leave to 18 weeks to match maternity pay, and provide new rights for adoptive parents. A number of those measures will flow from our implementing the European directive on parental rights, giving employees in Britain the same rights as their counterparts in the rest of Europe.
3.31 pm
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